FCC Agrees To Let AT&T And T-Mobile Withdraw Merger Application

Update: AT&T has responded to the release of the FCC’s report on their merger application, and they’re really not too happy about it. Their view is that the report was just a draft and furthermore, they never got to see it first.

They issued a statement, writing in part: “This report is not an order of the FCC and has never been voted on,” Jim Cicconi, AT&T’s senior executive vice president for external and legislative affairs, said in a statement. “The draft report has also not been made available to AT&T prior to today, so we have had no opportunity to address or rebut its claims, which makes its release all the more improper.”

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Earlier today, the Federal Communications Commission announced that it would allow AT&T and T-Mobile to withdraw their merger application, as they try to deal with a separate antitrust legal battle.

The news was originally broken by The Washington Post , which cited a source familiar with the matter, saying an announcement was due today and that the FCC was expected to accept the withdrawal. The two companies apparently want to focus on the Justice Department’s federal lawsuit against them first, before reapplying with the FCC for the merger.

Last week the FCC found the proposed deal would result in job losses and higher costs to the consumer, adding that it would put the merger application through to an administrative hearing. In addition, the FCC is said to be releasing its findings from their review of the deal.

For consumers, this means that the DOJ will have the benefit of the FCC’s analysis as to why the deal would be bad for the public interest, instead of just focusing on the competition between businesses.

That kind of negative attention is just what AT&T and T-Mobile don’t want during the antitrust battle, as it would very likely prevent them from meeting their September 2012 goal for the merger.

Parul P. Desai, Policy Counsel for Consumers Union, writes:

What this means for consumers is that the Justice Department and the court will have the benefit of having the analysis of the FCC as to why the merger is bad for the public interest. The FCC reviews this transaction with a broader look at the public interest, while Justice looks at it through a competition lens. The public interest standard includes issues like competition, jobs, diversity — serious concerns that could harm the public. When the merger was first announced, one of our primary concerns was the deal could lead to higher prices, and it appears the FCC came to a similar conclusion.

Update: AT&T has responded to the report’s release, writing in part: “This report is not an order of the FCC and has never been voted on,” Jim Cicconi, AT&T’s senior executive vice president for external and legislative affairs, said in a statement. “The draft report has also not been made available to AT&T prior to today, so we have had no opportunity to address or rebut its claims, which makes its release all the more improper.”